A major weakness of planning budgets is that A. They are feared only to a single level of activity. B. They cannot be used to assess whether variable costs are under control. C. They force the manager to compare actual costs at one level of activity to budgeted costs at a different level of activity. D. All of the above.

Question

Business

Steve Le

30 June, 00:18

A major weakness of planning budgets is that A. They are feared only to a single level of activity. B. They cannot be used to assess whether variable costs are under control. C. They force the manager to compare actual costs at one level of activity to budgeted costs at a different level of activity. D. All of the above.

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Answers (1)

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Dud · Answer 1

The correct answer is letter "D": All of the above.

Explanation:

Budgets are estimates of the expenses that may be incurred during the development of a project. Managers try to keep the expenditures as close as to the budget to make sure a reasonable amount of resources were used. Though, disadvantages of counting on budgets are, for instance, that they are set mostly to a single level of activity without considering adjustments that might be necessary as a result of external changes; also, budgets are a constraint for projects since the executive responsible must monitor how the resources are spent periodically to find out if they will be enough for the project completion.